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An Overview of The One Big Beautiful Bill

On July 4, 2025, President Trump signed the One Big Beautiful Bill into law. The legislation makes far-reaching changes to the federal tax code and other parts of the government. It passed by narrow margins in both chambers, with 51 to 50 in the Senate and 218 to 214 in the House. The bill cuts certain taxes, changes funding for a number of federal programs, raises the debt ceiling by $5 trillion, and extends many of the provisions originally introduced in the 2017 Tax Cuts and Jobs Act (TCJA).

Supporters believe the changes will support economic growth, while critics point to the risk of rising debt and higher borrowing costs. Businesses and individuals will want to revisit their tax planning considering these changes. To help clients, prospects, and others, WhippleWood CPAs has provided a summary of the key changes below.

Key Business Tax Changes

The bill includes several tax changes for businesses. Many provisions from the TCJA have been extended or made permanent. Key changes include:

  • Corporate Tax Rate — The corporate tax rate remains at 21%. This provides consistency for C corporations and allows for longer-range tax planning.
  • Qualified Business Income (QBI) Deduction — The 20% deduction for qualified business income under Section 199A is now permanent.
  • Bonus Depreciation — Bonus depreciation is back at 100%. Businesses can fully deduct the cost of eligible equipment and other capital assets in the year they are placed in service. This applies to property placed in service after January 19, 2025.
  • R&D Expensing — Research and development costs can once again be deducted in the year they’re incurred. This reverses the previous five-year amortization requirement and is expected to help companies that invest heavily in innovation.
  • Business Interest Deductions — The limit on interest deductions will now be calculated using EBITDA, rather than EBIT. That change likely gives companies with high depreciation or amortization a larger deduction.
  • Excess Business Losses – makes the limitations on deducting excess business losses permanent.
  • 1202 Stock Gain Exclusion – expands the 1202 stock exclusion rules.
  • Opportunity Zones – Creates new rounds of qualified opportunity zones.
  • Tip Credit – Expands eligibility for the tip credit to beauty services businesses.
  • 1099 Reporting – Increases the threshold for 1099 reporting to $2,000 in 2026 and adjusts it for inflation.

Key Individual Tax Changes

The One Big Beautiful Bill includes several major changes for individual taxpayers. These provisions impact income tax brackets, deductions, and credits. Key changes include:

  • Tax Brackets — The current income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are permanent. These lower rates were originally scheduled to expire in 2025.
  • Standard Deduction — The standard deduction is now set at $15,750 for single filers, $23,625 for heads of household, and $31,500 for married couples filing jointly. This reflects a nearly 7.5% increase across the board. These amounts will adjust annually for inflation.
  • SALT Cap — The SALT deduction cap increases from $10,000 to $40,000 beginning in 2025 and is indexed for inflation. In 2026, the indexed cap will be $40,400. The deduction phases out for taxpayers with income over $500,000. Unless Congress acts again, the cap returns to $10,000 in 2030.
  • Estate and Gift Tax — The estate and gift tax exemption increases in 2026 to $15 million per individual and $30 million per couple. These amounts will also be indexed annually. Prior to the bill, the exemptions was scheduled to be cut in half on January 1, 2026.
  • Child Tax Credit — The child tax credit increases to $2,200 per child and will adjust with inflation moving forward.
  • Charitable Contributions — The bill creates a new charitable contribution deduction for taxpayers who do not itemize. Nonitemizers can now deduct up to $1,000 (single) or $2,000 (married filing jointly) for qualifying charitable gifts. For taxpayers who itemize deductions, contributions will only be deductible to the extent they exceed 0.5% of taxable income.
  • Phase Out of Itemized Deductions – The bill reinstates the phase out of itemized deductions beginning with income taxed at the 37% rate.
  • Auto Interest Deduction – Allows a deduction for interest paid on new vehicles purchased after 2024 for vehicles assembled in the U.S.

Temporary Deductions for Workers and Retirees (2025–2028)

Several new deductions are available for a limited time. These apply for tax years 2025 through 2028.

Taxpayers can deduct up to $25,000 in tip income and up to $12,500 in overtime pay. Both deductions begin to phase out for individuals with income over $100,000 and for joint filers over $200,000.

Taxpayers aged 65 and older can claim a new $6,000 “senior bonus” deduction. This begins phasing out at $75,000 for single filers and $150,000 for joint filers.

Changes to Clean Energy Incentives

Many of the tax credits introduced or expanded under the Inflation Reduction Act are scaled back or eliminated. These changes affect individuals, businesses, and developers engaged in clean energy production and installation. Credits affected include:

The first set of changes takes effect September 30, 2025, when credits for new and used clean vehicles and for commercial EVs expire. On December 31, 2025, credits for home energy improvements and residential solar installations also end. The credit for alternative fuel refueling property remains available through June 30, 2026. Other clean energy credits remain in place for now but are subject to stricter requirements and faster phaseouts.

Strategic Takeaways

For businesses, the biggest change is stability. The corporate rate stays at 21%, the QBI deduction is no longer set to expire, and 100% bonus depreciation has been reinstated. Those provisions are likely to support long-term planning. R&D costs are once again fully deductible in the first year, and the interest expense limit is reverting to an EBITDA basis. That will likely benefit many capital-heavy industries.

For individuals, the impact will vary. Some households will benefit from lower rates and expanded deductions, while others may see little change. The new deductions for tips, overtime, and senior income are available through 2028 but begin phasing out at relatively modest income levels. The SALT cap is temporarily higher but set to drop back to $10,000 in 2030, with workarounds still available. The increase to the estate tax exemption will be important for high-net-worth families focused on long-term planning.

Clean energy incentives are being rolled back faster than expected. Anyone planning a renewable energy project will want to take a closer look at timing and eligibility while some credits are still available.

Contact Us 

With major changes to tax rules, both individuals and business owners are encouraged to revisit tax strategies. A proactive approach will be essential to capture benefits, manage risk, and stay compliant as the new provisions take effect. If you have questions about the information outlined above, or need assistance with another tax issue, WhippleWood CPAs can help. For additional information call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.

About the Author

Steve Barkmeier CPA

Steve Barkmeier CPA

It’s rare for even the largest accounting firms to be able to offer the expertise Steve brings to our clients. After 30 years of leadership positions in corporate tax departments at billion-dollar companies, including serving as the Vice President of Tax at the second largest newspaper chain in the United States, he joined WhippleWood in 2015.

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